Key focus: recovery from an interim loss to a ¥390 million full-year profit

FY2026-H1 revenue was ¥4,009.597 million, up 1.8% year on year, but operating results swung from operating income of ¥242.404 million in the same period last year to an operating loss of ¥132.809 million. Ordinary results also swung from a profit of ¥192.784 million to a loss of ¥151.771 million, while interim net income attributable to owners of the parent swung from a profit of ¥156.907 million to a loss of ¥166.811 million. The operating margin calculated against revenue fell by approximately 9.5 percentage points, from approximately 6.2% in the same period last year to approximately negative 3.3% in the interim period, indicating that higher revenue has not translated into profit.

The full-year forecast remains unchanged as of the H1 results, at revenue of ¥9,000 million, operating profit of ¥390 million, ordinary profit of ¥345 million and net income attributable to owners of the parent of ¥285 million. Interim revenue progress was approximately 44.6%, about 5.4 percentage points below the simple 50% midpoint of the fiscal year. As operating results were negative ¥132.809 million at the interim stage, achieving the full-year forecast requires operating profit of ¥522.809 million in H2. After deducting H1 revenue, required H2 revenue is ¥4,990.403 million, implying an H2 operating margin of approximately 10.5%.

The standalone second-quarter operating loss can be estimated at approximately ¥31.5 million from the difference between the first-quarter operating loss of ¥101.279 million and the cumulative interim operating loss of ¥132.809 million. This represents an improvement of approximately ¥69.7 million on a quarterly basis. However, the company remains loss-making even after the improvement, leaving a substantial gap to the H2 operating profit of ¥522.8 million required to meet the full-year forecast. The company has described investment in priority growth areas and stable operation of existing businesses, but has not sufficiently disclosed the amounts by expense category or a segment-level loss bridge explaining the shift to an H1 operating loss.

In FY2026-Q3, it will be necessary to review not only nine-month cumulative operating results but also standalone revenue and operating profit for the three-month third quarter. In particular, the key questions are whether the loss narrows further, whether losses in the games business improve, and whether sports content, development solutions and outsourced operations, which are expected to contribute in H2, are actually converting into profit. Even if the full-year forecast is maintained, the company needs to explain specifically which businesses and cost controls will generate the ¥522.8 million required over the remaining period.